LICENSE AGREEMENT
This is an agreement (the "AGREEMENT") dated and effective as of the
date of last signature below (the "Effective DATE"), by and between the
following parties:
a) Biosearch Medical Products, Inc., a corporation having its principal
office at 35 Industrial Parkway, Somerville, New Jersey 08876
("LICENSOR"); and
b) Applied Medical Resources, Inc., a corporation having its principal
office at 26051 Merit Circle, Building 104, Laguna Hills, California
92653 ("APPLIED").
ARTICLE 1- BACKGROUND
1.1 Licensor is the owner of certain formulations and know-how for the
production of the following specific lubricious and primer coatings for use
in the Licensed Product Markets (the "LICENSED TECHNOLOGY"):
(i) BMPI 48TS designed for coating Pellethane
(ii) BMPI 49TS designed for coating C-Flex
(iii) BMPI 51TS (TS43 + S4) designed for coating Polyester
(iv) BMPI 40TS Clear Stainless Steel Guidewire primer
(v) BMPI 63TS Blue Stainless Steel Guidewire primer
(vi) S4 hydrophilic coating
1.2 Applied desires to obtain a license from the Licensor to use the Licensed
Technology.
1.3 Licensor is willing to grant to Applied a license to use the Licensed
Technology upon the terms and conditions set forth below.
Therefore, in consideration of the mutual promises contained in this
Agreement, the parties agree as follows:
ARTICLE 2- DEFINITIONS
The following terms, when used with initial capital letters, shall have the
meanings set forth below.
2.1 "LICENSED PRODUCT MARKETS" are the worldwide markets for: (i)
vascular/cardiovascular products; (ii) endourology products (including
non-balloon Foley-type catheters); and (iii) general surgery products.
Licensed Product Markets specifically do not include the worldwide markets
for: (i) urological drainage (Foley-type) catheters with balloons; (ii)
indwelling vascular/cardiovascular stents and grafts; (iii) OEM coating
services on devices or products not manufactured by Applied; and (iv)
intermittent urinary drainage catheters.
2.2 "FINAL TRANSFER DATE" is September 30, 1999.
2.3 "LOAN AGREEMENT" is the agreement executed by Applied and Licensor on May
13, 1999 that is attached hereto as Exhibit A.
ARTICLE 3- LICENSE GRANT
3.1 Subject to the terms and conditions of this Agreement, as of the Effective
Date, Licensor hereby grants to Applied a perpetual, non-exclusive,
worldwide license to make, have made, use, sell, or otherwise dispose of
products incorporating the Licensed Technology in the Licensed Product
Markets.
3.2 Applied agrees to use the Licensed Technology only in connection with the
medical devices and products that Applied makes, uses and/or sells. Applied
shall not make the Licensed Technology available to any third party for a
period of ten (10) years from the Effective Date.
3.3 The foregoing sections 3.2 and 2.1 shall have no force or effect with
respect to any portion of the Licensed Technology that is or becomes public
through no fault of Applied.
ARTICLE 4 -TECHNOLOGY TRANSFER
4.1 Licensed Technology Transfer Licensor shall transfer the Licensed
Technology to Applied on the Effective Date. Transfer of the Licensed
Technology includes providing all of the formulations, specifications,
instructional materials, and training necessary and useful for Applied to
make commercial use of the Licensed Technology. The transfer of the
Licensed Technology shall not be deemed by Applied to be complete until
Applied has sufficient information and reasonable training to utilize the
Licensed Technology in commercial operation. Licensor shall undertake and
consummate all the research and other steps necessary to ensure that the
Licensed Technology is developed and transferred to Applied as soon as is
reasonably practicable and, in any event, no later than the Final Transfer
Date.
4.2 Extension of Final Transfer Date The Final Transfer Date may be extended
only by joint agreement of Licensor and Applied in writing.
4.3 Continuing Technical Support For a period of three (3) years from the
Effective Date, Licensor shall provide the technical and consulting support
that is reasonably necessary for Applied to make commercial use of the
Licensed Technology. Applied will reimburse Licensor for out-of-pocket
travel costs incurred in providing technical support to Applied under this
section 4.3, provided that Licensor obtains Applied's approval in advance
of incurring such costs.
ARTICLE 5- PAYMENTS
5.1 License Fee Payment As of the Effective Date, Licensor accepts receipt of
an initial license fee payment of Fifty Thousand Dollars ($50,000.00) (the
"INITIAL LICENSE FEE"). Prior to the date hereof, pursuant to the Loan
Agreement, Licensor received a loan of Fifty Thousand Dollars ($50,000.00)
from Applied on May 13, 1999 (the "LOAN"). As of the Effective Date, the
parties agree to set off the Initial License Fee and the Loan, such
-2-
that as of the date hereof the Initial License Fee shall be deemed paid by
Applied, and the Loan shall be deemed repaid by Licensor.
5.2 Licensed Technology Transfer and Support Fee In consideration of the
Licensed Technology transfer and technical support provided by Licensor to
Applied under Article 4 herein, Applied shall pay Licensor Seventy Five
Thousand Dollars ($75,000.00) on the Effective Date and Twenty Five
Thousand Dollars ($25,000.00) upon the completion of the transfer or on
September 30, 1999 whichever comes first.
ARTICLE 6- WARRANTIES AND REPRESENTATIONS
6.1 Licensor expressly warrants and represents that (a) it is empowered to
grant the license of the Licensed Technology granted; (b) this Agreement
and the full performance and enjoyment of the rights granted under this
Agreement will not breach the terms and conditions or any license,
contract, understanding or agreement, whether express, implied, written or
oral between the parties and any third party; (c) Licensor has the sole,
exclusive and unencumbered right to grant the license and rights granted
herein to Applied; and (d) the Licensed Technology does not infringe upon
or otherwise conflict with the intellectual property rights of any third
party.
6.2 Licensor shall indemnify and hold Applied harmless from all liabilities,
demands, damages, expenses and losses upon the breach of any of the
warranties and representations set forth in Article 6.1 above.
ARTICLE 7- ARBITRATION OF DISPUTES
Any controversy or claim arising out of or relating to this Agreement, or
the decision to enter into this Agreement, or the breach thereof, shall be
settled exclusively by arbitration in accordance with the provisions, then
obtaining, of the American Arbitration Association (AAA) before a panel of three
(3) arbitrators. The law of the State of New Jersey shall apply to the
arbitration proceedings. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof. In connection with any such
arbitration, the prevailing party shall be entitled to recover from the
nonprevailing party reasonable expenses including, without limitation,
reasonable attorneys' fees and reasonable accountants' fees. If the arbitrators
are unable to designate a prevailing party, they shall so state and the expenses
shall be split equally between the parties.
ARTICLE 8 - MISCELLANEOUS
8.1 Assignment Applied may assign this Agreement or any rights and obligations
contemplated herein to a company acquiring substantially all of the assets
of Applied, without the consent of Licensor, upon giving written notice
thereof to Licensor. Licensor may assign Applied's payment obligations set
forth herein to a third party, upon giving written notice thereof to
Applied. Any such assignment shall be subject to the terms of this
Agreement. In all other instances, neither Applied nor Licensor shall
assign this Agreement or any rights granted hereunder without the prior
written consent of the other
-3-
party. Subject to the foregoing, this Agreement shall bind and inure to the
benefit of the respective parties hereto and their successors and assigns.
8.2 Relationship of Parties The parties hereto are entering into this Agreement
as independent contractors, and nothing herein is intended or shall be
construed to create between the parties a relationship of principal and
agent, partners, joint venturers or employer and employee. Neither party
shall hold itself out to others or seek to bind or commit the other party
in any manner inconsistent with the foregoing provisions of this section
8.2.
8.3 Indemnification and Hold Harmless The parties hereto agree to indemnify and
hold harmless the other party for any negligent or willful act of one
party, or any agent or employee of that party, which results in the
assertion of a claim for damages against the other party. Such
indemnification shall not apply where the party seeking indemnification
contributed to or was responsible for the basis of the claim for damages.
8.4 Integration It is the mutual desire and intent of the parties to provide
certainty as to their future rights and remedies against each other by
defining the extent of their mutual undertakings as provided herein. The
parties have in this Agreement incorporated all representations,
warranties, covenants, commitments and understandings on which they have
relied in entering into this Agreement and, except as provided for herein,
neither party has made any covenant or other commitment to the other
concerning its future action. Accordingly, this Agreement constitutes the
entire agreement and understanding between the parties with respect to the
matters contained herein, and there are no prior oral or written promises,
representations, conditions, provisions or terms related thereto other than
those set forth in this Agreement. The parties may from time to time during
the term of this Agreement modify any of its provisions by mutual agreement
in writing.
This Agreement is signed on the dates set forth below by duly authorized
representatives of Applied and Licensor, respectively.
Applied Medical Resources, Inc. Biosearch Medical Products, Inc.
By: S/S By: S/S
Printed Name: Nabil Hilal Printed Name: Martin Dyck
Date: 06/04/99 Date: 06/07/99
-4-
EXHIBIT A
LOAN AGREEMENT
This Agreement is dated this 13 day of May, 1999, by and between Applied
Medical Resources Corporation, having a business address of 26051 Merit Circle,
Building 104, Laguna Hills, California 92653 (hereinafter "Applied Medical") and
Biosearch Medical Products, Inc., having a business address of 35 Industrial
Parkway, Somerville, New Jersey 08876-1276 (hereinafter "Biosearch").
WHEREAS, Biosearch is the owner of know-how and technology related to lubricious
coating of medical devices as more fully defined in Paragraph 2(d), (e) and (h)
(the "Technology"); and
WHEREAS, Applied Medical is planning to produce and market products
incorporating the Technology ('Product(s)"), and desires to retain Biosearch to
develop and/or transfer the coating process for said Products and to obtain a
non-exclusive license under Biosearch's Technology.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged and for the mutual promises, duties and
obligations herein contained, the parties hereto do hereby agree as follows :
1 Loan -- Applied Medical shall extend a loan ("Loan") to Biosearch in
the amount of Fifty Thousand Dollars ($50,000.00) following execution
hereof, but in no event later than five (5) days following execution.
Such Loan amount shall be applicable toward a research and license
agreement, ("License Agreement") the parties intend to negotiate in
good faith based on the terms defined in Paragraph 2 herein. Biosearch
agrees to repay Applied Medical the full Loan amount by July 15, 1999
if the parties do not finalize the License Agreement by June 15, 1999.
2. License Agreement -- Applied Medical and Biosearch shall negotiate in
good faith a License Agreement based on the following general terms:
(a) License Biosearch shall grant Applied Medical a non-exclusive,
worldwide royalty free license to make, use or sell Products
incorporating the Technology in the markets defined in paragraph
2(b) below
(b) Markets -- Subject the exclusions defined in paragraph 2(c),
Applied Medical shall have the right to make, use or sell medical
devices and products incorporating the Technology in
vascular/cardiovascular, endourology (including non-balloon Foley
type catheters) and general surgery markets.
(c) Exclusions -- Excluded from the definition of the Markets defined
in paragraph 2(b) above are the following:
(i) Urological drainage (Foley) catheters with balloons.
(ii) Indwelling vascular/cardiovascular stents and grafts.
(iii) OEM coating services on products not manufactured by
Applied Medical
(iv) intermittent urinary drainage catheters.
-5-
d) Research and/or Technology Transfer - Biosearch shall transfer to
Applied Medical and/or as needed, conduct research and develop
surface preparation and coating processes, as defined in
paragraph 2(h), in accordance with a mutually agreed upon
schedule. Technology transfer shall include all documentation and
qualification of all steps necessary and useful for Applied
Medical to make and apply the surface preparation and coating
material to the Products.
(e) Consulting and Technical Support - Biosearch shall provide
consulting and technical support to Applied Medical to apply the
S4 coating on Products and assist in resolving technical problems
as may be reasonably requested by Applied Medical during the Term
of the License Agreement.
(f) License Fee - Applied Medical shall pay Biosearch a one-time
license fee of Fifty Thousand Dollars ($50,000.00) on the
effective date of the License Agreement. The Loan amount defined
in Paragraph 1 above will be applied towards the License Fee
(i.e. extinguished).
(g) Research and/or Technology Transfer Cost - Applied Medical shall
pay Biosearch Seventy Five Thousand Dollars ($75,000.00) upon
signing the Agreement and Twenty Five Thousand Dollars
($25,000.00) upon the completion of the transfer or on September
30, 1999 whichever comes first.
(h) Coating Processes -- Biosearch shall develop and/or transfer to
Applied Medical the following processes for the coating of
Applied Medical's Products:
(i) BMPI 4S TS for Pellethane dilators and sheaths.
(ii) BMPI 49 TS for C-Flex coaxing
(iii) TS 51 (TS43 + S4) for Polyester mesh stents
(iv) SS Primer for Guidewires
(v) S4 for all Products
(i) Term - Three Years.
(j) OEM Exclusion -- Applied Medical agrees that for at least ten
(10) years from the effective date of the License Agreement, to
only use the Technology for its own application and Products and
to not make the Technology available to a third party.
3. Hold Harmless and Indemnification The parties hereto agree to indemnify and
hold harmless the other for any negligent or willful act of one party, or
any agent or employee of a party, which results in the assertion of a claim
for damages against the other party. Such indemnification shall not apply
in the circumstances in which the party claiming indemnification from the
other contributed to or was responsible for the basis for the claim for
damages.
-6-
4. Both parties are independent contractors under this Agreement. Nothing
contained in this Agreement is intended nor is to be construed as to
constitute Applied Medical or Biosearch as partners, agents, or joint
ventures. Neither party hereto will have any express or implied right or
authority to assume or create any obligations on behalf of or in the name
of the other party or to bind the other party to any contract, agreement or
undertaking with any third party.
IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement on the
dates set forth below, by the signature of their duly authorized
representatives.
Applied Medical Resources Corporation Biosearch Medical Products, Inc.
S/S S/S
Nabil Hilal, Sr. VP. Martin C. Dyck, President
Date: 05/13/99 Date: 05/13/9
-7-